Under the new offer, Vedanta will give one share and four redeemable preference shares for each share in Cairn India. The additional three preference shares are worth Rs 30 and would carry a coupon (interest rate) of 7.5 per cent.
Earlier Vedanta was offering one share and one redeemable preference share for each Cairn share. Vedanta shareholders will vote on the new offer on September 8, while Cairn India shareholders will vote on September 12.
Some analysts said the new deal is attractive for Vedanta, which will get Cairn India's Rs 20,000 crore of cash on books, helping the company to reduce its debt liability.
"The revised terms seem definitely more attractive and conducive than (the offer) in the past," said Jigar Shah, chief executive at Maybank Kimeng Securities.
However, brokerages added that the deal will be earnings dilutive for Vedanta, which means earnings of Vedanta are likely to fall post the merger with Cairn India.
According to CLSA, Vedanta's FY18 earnings per share (EPS) may fall to Rs 17.6, compared to its earlier estimate of Rs 20. However, CLSA has upped target price on Vedanta to Rs 205 saying that the merger will drive re-rating of Vedanta shares as it will get better access to cash. CLSA has a "buy" call on Vedanta.
Duetsche Bank also said that the deal will be earnings dilutive for Vedanta in the near term. The brokerage has a "hold" rating on Vedanta with a target price of Rs 163 per share.
As of 10.41 a.m., Vedanta shares traded 1.3 per cent higher at Rs 171.1 apiece and Cairn India shares were up 1 per cent at Rs 193.80 compared to a flat Nifty.
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